Deficit hawks have clearly lost ground to deficit doves in Washington.
A tax-cut bill is under negotiation between the White House and Republican-led houses of Congress. The ceiling for its expansion of the deficit seems to be $1.5 trillion.
Tax cuts expand deficits — at least in the short term.
That is true even if you believe, as long espoused in the GOP, that cuts in the right corporate, business and individual taxes will more than pay for themselves through an economic resurgence.
The current federal deficit is pegged at $440 billion. The long-term national debt is said to total more than $13.62 trillion.
“In order to make good on our campaign tax promise, there probably are going to be some sacrifices made from an ideological perspective,” Rep. Steve Womack (R-Ark.), a longtime deficit hawk, told Politico.
“I believe that the biggest remedy for our fiscal situation is growth in the economy,” he added. “I am not averse to some deficit spending in order to create long-term sustained growth.”
Tax cuts can be modulated, rearranged and combined with spending reductions to put spending more in line with revenues.
But there are pressures on the federal budget that don’t seem on any path to balance.
During the campaign, President Donald Trump promised not to cut Social Security or Medicaid. Some analysts pointed out that his proposed budget in May did slash those programs. That remains unresolved.
Part of the mix is Obamacare, which costs federal money. Repeal-and-replace failed so far, and has already become a bargaining chip in the current end-of-year Congressional talks.
Next year, Trump is expected to take up his proposal for a trillion-dollar-plus infrastructure rebuilding program, plans for which have been in disarray.
And there are emergency funds in play for hurricane-ravaged parts of America.
Another complication, experts seem to agree, is that tax cuts will widen the nation’s trade deficit — which Trump has vowed to shrink.
Trump gave a hint of a different attitude from the GOP mainstream toward red ink when he was campaigning last year.
“I’m the king of debt. I’m great with debt. Nobody knows debt better than me,” Trump the candidate told CBS in June 2016.
“How do you renegotiate the debt?” he was asked.
“You go back and you say, ‘hey guess what, the economy crashed,’ ” Trump replied. “I’m going to give you back half.”